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# Answer to Question #14954 in Macroeconomics for marmar

Question #14954
The Fed sells $10,000,000 in bonds to Jim, a bond dealer who pays for the bonds with a check drawn on his bank. Assume a 10% required reserve ratio. Which of the following statements correctly records this transaction at Jim&#039;s bank with respect to the bank&#039;s reserves? The bank&#039;s reserves will go up by$1,000,000.

The bank&#039;s reserves will go down by $10,000,000. The bank&#039;s reserves will go up by$10,000,000.

The bank&#039;s reserves will go down by $100,000,000. 1 Expert's answer 2012-09-18T11:53:23-0400 The bank&#039;s reserves will go up by$1,000,000.
Because paying with the check he increases the money amount of the bank by 10,000,000, so the bank needs to increase its
reserves by 1,000,000

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